Tuesday, May 20, 2008

Canadian existing home sales for April were released late this afternoon by the Canadian Real Estate Association, and were up a tad from March (+0.8% in seasonally adjusted terms).

That still left sales down 6.1% y/y versus a weather-pounded 18.7% y/y plunge in March. (In seasonally adjusted terms, sales were down 12% y/y in both months.) Average prices rose just 3.2% y/y, versus a Q1 pace of 5.5% and an 11% increase for all of 2007. That’s the slowest increase for prices since October 2001. Prices actually fell from a year ago in both Calgary and Edmonton, as well as in Windsor and St. Catharines. (Talk about the two extremes of the growth rainbow.)

Even Vancouver saw price increases dip into single-digit terrain, joining Toronto and Ottawa. However, Regina (at +64.6% y/y), Saskatoon (+31.2%) and Winnipeg (+19.9%) are still ripping along with double-digit price gains, joined by a few other smaller cities in central and eastern Canada.

So far this year, national home sales are down 11% y/y, and prices are up a moderate 4.8%.

The sales drop and the modest price gain are well down from years of double-digit increases, and further confirmation that the boom days are over. Notably, no city in the country has reported a price decline from year-ago levels over the first four months of the year, so the slowdown is still far from mimicking the U.S. experience.

However, we would point out that new listings have climbed more than 8% this year, even as sales have slid, pointing to “a more balanced market” according to CREA (i.e. much more of a buyer’s market), and even less upward pressure on prices looking ahead. In CREA’s words --- “presentation factors such as prudent pricing are necessary for a faster sale”. That’s a polite way of saying: If you’re looking for double-digit price gains, dream on